Tuesday, September 30, 2008

During the press conference that followed the Monday afternoon vote, Deputy Whip Eric Cantor (R-Va.) held up a copy of Pelosi’s speech, saying, “Right here is the reason, I believe, why this vote failed, and this is Speaker Pelosi’s speech that, frankly, struck the tone of partisanship that, frankly, was inappropriate in this discussion.”

Rob Collins, Cantor’s chief of staff, said on Tuesday that the speech itself didn’t switch votes, but the message that it sent poisoned the bipartisan tone that Boehner and Majority Leader Steny Hoyer (D-Md.) set.

“Her unscripted attacks ran counter to our message of bipartisan unity ... I am not going to say her speech on the floor mattered, but it is a symptom of a larger illness with the Speaker,” Collins said.

During a Tuesday interview on Fox News, House Republican Conference Chairman Adam Putnam (Fla.) did not mention Pelosi’s floor speech.

Minority Whip Roy Blunt (R-Mo.) said on Monday evening the speech wasn’t the sole cause for members voting no, but tipped the scales for some who were on the fence.

“On those kinds of decisions [members] are often looking for that final reason to not do what they intended to do,” he told reporters after the vote.

Shadegg, who mounted failed leadership bids for majority leader, and later, minority whip, said he believes that “hurt feelings” following the lost votes caused Boehner and other GOP leaders to lash out at Pelosi in the moments after the 205-228 tally.

“It was embarrassing for leadership of both parties to lose the bill,” Shadegg said. “So they went out and made a stupid claim.”

Some conservatives also ripped leadership’s claims. Richard Viguerie, a conservative activist, said Tuesday that Republican leaders reacted to the bailout vote “by giving Nancy Pelosi credit for killing the Bush-Paulson scheme, and by falsely accusing their own members of throwing a temper tantrum.”

Peter Wehner, a former speechwriter for President Bush, called the insinuation that the vote failed because of Pelosi’s speech “lame and adolescent” on National Review Online’s The Corner.

“Can they be serious? Do they realize how foolish and irresponsible they sound? On one of the most important votes they will ever cast, insisting ‘the speech made me do it’ is lame and adolescent,” he wrote. “Watching Boehner, Blunt, and Cantor blame the outcome on the Pelosi speech was an embarrassment.”

You can only shriek that the other side is being partisan and "politicizing" politics so many times before people notice that you are behaving like an hysterical maiden aunt at a Chippendales concert every time someone legitimately criticizes you. Eventually somebody is going to tell you to stifle it and go wait in the car.

They attempted to deflect all blame to Pelosi and it didn't work. I'm beginning to wonder if we aren't seeing change we can believe in after all.

One the most surprising things to me about Sarah Palin is that I had her pegged as someone who was a working cog in the right wing machine --- she's a professional politician, Governor of a rural Red State who comes from the evangelical wing of the party, (Mike Huckabee in pumps although the literal visual there is oddly believable ... ) But the Couric interview shows that she really isn't an engaged member of the Wingnut Right at all. Indeed, she seems more like a casual voter than someone who is professionally involved in partisan politics. It's not that she is a stupid person. Maybe she is, but you can't tell that on the basis of a couple of interviews. But she is dramatically uninformed about current events, history, and even Republican politics.

And what's more interesting is that she doesn't even have the usual Limbaugh-esque, boilerplate talking points at ready disposal or the ability to stay within the parameters of wingnut political gibberish as Bush does. (He was no better informed in 1999 than she is now, but he had the benefit of growing up in a political family and hearing political talk all his life, so he was able to fake the cadences and attitude well enough.)

In fact, it occurred to me today that Palin's "maverickness" may not be maverick at all. It may just be that she didn't know she wasn't supposed to do what she did. It seems entirely possible to me that she thought that going against the oil companies or selling the Governor's jet was a normal thing for a Republican in Alaska to do, not realizing that she was actually doing something that was wholly outside the normal political culture. She just stumbled into doing what she did and everyone thought she was boldly taking on the GOP establishment.

I don't know this, of course. But everything about her screams apathetic, non political person who doesn't even read the newspaper or books --- or even listen to talk radio. That doesn't make her dumb --- a large number of Americans are just like that. But it does make her a very, very unusual politician.

The strange thing is that I honestly think people wouldn't care about that if she were not the first female, from whom more is expected, and if we weren't in such a turbulent time. To me, the fact that McCain is still even within shouting distance of winning with a running mate so dramatically uninformed is some kind of cosmic joke. But I'm not sure that a majority would agree if not for those other circumstances.

Jon Stewart said the other night after one of her bizarre non answers: "Did she win a contest?" I think she did. She won the Hockey Mom contest and got the right to run on the national ticket with John McCain. She was the prototype Republican for the next generation --- someone who knows absolutely nothing about politics at all. I guess they must have figured that Bush's failure was due to the fact that he knew too much.

For some witty and penetrating Palin musing, be sure to check out Kathy Gs posts, here and here.

After the debacle of the last few days and the threat of ongoing economic and foreign policy turmoil, it has never been more clear that we need to elect more and better Democrats.

Today is the last day of the quarter and all the candidates are strapped to their phones trying desperately to raise that last bit of coin to take them over the top. If you haven't donated yet, or are thinking about your 401k or your mortgage and know that congress is going to have a hand in keeping the wolves from the door, it might be time to invest in some good politicians who will be forming a real progressive caucus with your values and your interests in mind in the next congress. Think of them as the Anti-Blue Dogs.

You can donate to any of our Blue America candidates at this link. I'm sure they would appreciate it. Your kids and grandkids would probably appreciate it too...

There are probably many reasons why Republicans in the House didn't back the Paulson bill, but this has to be one of the biggies:

For McCain, a major hindrance has been his perceived ties to the deeply unpopular Republican president. Slightly more than half of voters, 53 percent, said they think McCain would lead the country in the same direction as Bush, a small move up from a Post-ABC poll following the GOP convention earlier this month. Voters who see McCain's candidacy as a continuation of Bush's policies overwhelmingly back Obama.

The connection with Bush is a growing problem, as the sagging economy has added to the drag on public assessments of the president. Bush's approval rating has now dropped to an all-time-low in Post-ABC News polls, with just 26 percent giving him positive marks for his performance and 70 percent giving him negative reviews.

Only two modern presidents -- Harry Truman and Richard M. Nixon -- have had lower approval ratings; none has had higher disapproval numbers. On the economy, just 22 percent said they approved of the way he is doing his job. That too is a new career low for the president.

Nearly three in 10 voters singled out Bush as the principal reason the country is in its current economic straits. Wall Street financial institutions and banks followed closely on the blame list. Voters also mention the federal government, Congress, Republicans, Democrats, overextended homebuyers and others as root causes.

Unfortunately, voting against the bill only deepened their problem:

As for Monday's ill-fated House vote, by a 2 to 1 margin, voters hold congressional Republicans more responsible for Monday's rejection of a $700 billion rescue package supported by President Bush, congressional leaders of both parties and both major party presidential candidates.

[...]

Almost all voters see the current financial situation as a big problem, with a majority, 52 percent, describing it as a "crisis." And in a question asked of a parallel sample of randomly-selected adults on Monday evening following the House's rejection, voters were also nearly unanimous in their concern the vote would deepen the country's financial downturn.

These Republicans are between a rock and a hard place now. They have to run away from Bush and they have to run away from McCain and they have to run against Obama and the Democrats. Unfortunately, they are also being held responsible for defeating a bill that citizens didn't much like but are concerned that its failure will cause the country to fall further into crisis. They've got themselves in a vise.

You can see a real weakness in our founder's vaunted system right now. A parliamentary system would allow the government to have a vote of no confidence immediately and put someone in charge who had some credibility. We are stuck with this lame-duck functional moron (h/t Bill Maher) for nearly four more months and the vacuum of leadership is a serious problem. Meanwhile, the conservatives have so degraded the country's faith in its government institutions that nobody believes there is even an adequate bureaucracy to carry out basic tasks anymore. It's a dangerous thing for the most powerful country in the world to be without specific knowable leadership at a time of crisis in the middle of an historically important election. But that's where we are.

The most amusing thing about all of this (if there's anything amusing at all) is that the Big Money Boyz seem to have awakened and realized that the party they've been supporting all these years has been taken over by a bunch of dogmatic rubes who, when push comes to shove, refuse to support their masters. And after all they did for them ...

An important week for the Presidential campaign has just begun. Despite Republican efforts to stop it, the state of Ohio opened their early voting stations this week, and they are one-stop polling places, where you can register and vote on the same day. Due to an overlap between voter registration deadlines and the beginning of the early voting period, this will only last from Sept. 30-Oct. 6. But turnout is expected to be large:

Election officials around Ohio prepared for a rush of early voting Tuesday, the first day absentee ballots are accepted in advance of the Nov. 4 presidential election.

Backed by the state Supreme Court and two federal judges, Secretary of State Jennifer Brunner, a Democrat, is allowing new voters to register and cast an absentee ballot on the same day from Tuesday through Oct. 6 [...]

In Columbus, voters wanting to cast ballots as soon as possible on Tuesday morning had set up tents Monday night to wait in line outside the Franklin County Board of Elections.

Obama's campaign organized car pools from college campuses to early voting sites. The Northeast Ohio Coalition for the Homeless is ferrying voters from homeless shelters to polling sites in the Cleveland area. Other organizations that seek to increase poor and minority participation in elections are transporting voters from low-income neighborhoods.

The targeted voters have all traditionally had a harder time getting registered, and then getting to polling places on Election Day.

McCain's campaign is trying to organize around this as well, but Obama's campaign is placing an emphasis on it. The Democratic nominee created a message to voters in Ohio, and he's using text messaging to get out the word. (Text O-H to 62262 for more information). The campaign also has a wealth of resources for volunteers to come and help get out the vote. Obama's people are using the rallying cry that John Kerry lost Ohio, and the election, by 9 votes per precinct. The early voting golden week window can close that gap. And here's a great account of one voter's experience at an early voting station, which went very smooth. The difference between Secretary of State Ken Blackwell in 2004 and Secretary of State Jennifer Brunner, one of our best, in 2008 is stratospheric. Winning the state is an available option this time, if Obama gets out the vote.

McCain cannot win the election without Ohio. That's not just a political axiom, it's a fact. There's virtually nowhere on the board he can make up the loss of 20 electoral votes there. If you know anyone in Ohio, you should let them know that they can register and vote this week only.

I've been writing quite a bit about the building rightwing "explanation" for the economic crisis: the blacks and the Mexicans stole your tax money to buy perfectly good houses they couldn't afford and the wreck them. Perlstein called it "a modern day equivalent of the Protocols of the Elders of Zion—a Big Lie narrative that blames a despised, outcast social group for problems they had nothing to do with, in order to aggrandize the ability of the dominant group to hate and oppress." There are a lot of awesomely outrageous claims floating around in right wing circles right now as they desperately to keep the whole ship from going down, but that has to be the most despicable.

But even more scary is the idea that it might just work. Rick recounts a tale of the modern media, which is both familiar and infuriating:

So what did I do in that Chicago radio studio last Friday when a wingnut (who, incidentally, is African American) spewed forth some excrement about how Jews harvest the blood of children for their Passover matzohs handouts to swarthy people are responsible for the meltdown of the American economy? I did my job. I called it a "lie and a slander," explaining in simple and forceful terms that lending institutions covered by the CRA have a lower mortgage default rates than ones that aren't, and that even if the former were the worst companies in the history of the universe, they wouldn't have helped produce the financial contagion had not conservative deregulation green-lighted the buying and selling of insanely irresponsible mortgage-backed securities.

Rick heard the segment later and they had cut out his debunking of the right wing smear completely.

... the reason a conservative lie was allowed to stand could have been perfectly innocent: perhaps the audio of my debunking was garbled by crosstalk. Perhaps they cut without a second thought, just for purposes of time; my stint in the recording studio was twice again as long as the completed segmented, so they had to cut somewhere.

But it's also possible that the producers' thinking could have went something like this:

He said: "it's the conservatives' fault." She said: "It's the liberals' fault." Both drew political blood in equal measure, and the canons of fairness and balance demand we leave it at that, rather than let the liberal sneak in the last word: "He said, she said"—snip, snip, snip.

Which would be a splendid illustration of how conservatives launder lies across our political discourse. Textbook, actually. No malice aforethought on the part of the media gatekeepers; just an overcautious commitment to the value of what they call "balance" over the value of Truth with a capital T.

Which is just how the right might be able to get away with making the 2008 presidential election a referendum, for millions of low-information voters, over whether minorities should be able to get away with taking over all the instruments of federal power and writing checks to each other, or whether they will be stopped before it's too late.

From the moment I first heard this lie last fall during the originally rumblings of the credit market crisis, I knew it would end up having salience for an awful lot of Americans. This is one of the foundations of conservative tribe dogma: the other tribe is trying to take your hard earned money and give it to the dark skinned others. It's so embedded into their lizard brains that they don't even know it's what they believe, but it's at the heart of the fact that every time something goes wrong in our system, a fair number of people reflexively blame blacks and other minorities for their problems. And it's why we have the thinnest safety net of all first world countries and why we are constantly fighting a rear guard action to keep what we have.

DeFazio's plan is not in any way based on the Paulson/Bush plan. Instead of throwing taxpayer dollars at the program and crossing our fingers that the plan work, the measure will direct the Administration to take five simple steps, suggested by noted economist and former head of the FDIC, William Isaac, to re-regulate the markets and move America towards a healthy financial future.

SEIU is backing it and Congressional Quarterlyreported the other day that 106 Republicans would sign on to a bill with these elements. (I'll believe that when I see it, but ... )

I don't know the details of the plan, but I do have a little bit trust in this group than the Bush administration so my mind is open and I'll be anxious to see it.

I do believe that it's also important for Democrats to begin to argue, right this minute, that this legislation is nothing more than an emergency stop gap measure and that the economy at large has been battered and degraded by years of conservative experiments in laissez faire, supply side economics, rapacious lenders and lack of important investment in the future. The results of that gilded age of the vastly wealthy becoming ever richer at the expense of ordinary Americans is at an end, and we are desperately in need of a New New Deal for the 21st century to grapple with the much larger underlying problems.

That, of course, is something for Senator Obama to take the lead on. I would love to see him make that argument at the next debate. If they insist upon creating conditions for a Shock Doctrine, liberals should step in and use it for good. They've done it in the past and it made this country a much, much better place.

It's worth understanding that the failure of the bailout package in the House was a failure of leadership, as I said last night. Nobody has confidence in the political system, and the political class closest to the people revolted. There's no trust and no belief, and so a popular uprising is the result. There will be incumbents falling that you never expected in November, if challengers figure out how to channel that anger. While the support of the bill was mixed, the opposition was quite vocal and almost nobody believed that regular people would get anything out of it.

But putting aside whether or not you wanted the bill to pass, this failure is more pronounced on the Republican side. The facts are that 2/3 of their caucus voted against the plan, after the leadership assured everyone that they would get half their side. Their leadership scrambled and tried to blame it on a partisan speech given by Nancy Pelosi, which their own membership later denied.

Rep. Michele Bachmann (R-Minn.) threw cold water on a key rationale House Republican leaders have been employing this afternoon to explain why they couldn't deliver more GOP votes for the Wall Street bailout package.

At a Monday afternoon press conference, GOP leaders argued that Speaker Nancy Pelosi (D-Calif.) cost the measure a dozen Republican votes by delivering an overly partisan floor speech in support of it.

But Bachmann, speaking at a Republican Study Committee press conference, told reporters, "I want to assure you that was not the case. We are not babies who suck our thumbs. We have very principled reasons for voting no."

The larger point is that nobody's in charge of the Republican Party anymore. Their President and their current standard-bearer urged a yes vote and they couldn't get it. And the "elder statesman" of the conservative base, Newt Gingrich, apparently stabbed leadership in the back:

Former House Speaker Newt Gingrich was working aggressively behind the scenes to defeat the Wall Street rescue plan minutes before he himself released a public statement in support of the package, NBC's Andrea Mitchell reported on Tuesday.

Gingrich was whipping up votes for the opposition, Mitchell said, apparently without the knowledge of the current GOP leader, John Boehner, who was responsible for recruiting enough support from his caucus to help ensure the bill's passage. Ultimately, the GOP was only able to rally roughly a third of its members.

"Newt Gingrich," she said on MSNBC, "I am told reliably by leading Republicans who are close to him, he was whipping against this up until the last minute, when he issued that face-saving statement. Newt Gingrich was telling people in the strongest possible language that this was a terrible deal, not only that it was a terrible deal, it was a disaster, it was the end of democracy as we know, it was socialism -- and then at the last minute [he] comes out with a statement when the vote is already in place."

Indeed, as Mitchell noted, shortly before the bill's failure, Gingrich "reluctantly" came out in favor of its passage: "Therefore, while I am discouraged at the final collapse of the Bush Administration, and frustrated by the Democrats' passion for the taxpayer's money, I would reluctantly and sadly vote for the bailout were I still in office."

Wow. That's just chaos. A lot of time we Democrats think that the GOP strategist class is a collection of evil geniuses, plotting away and cleverly setting up their opponents over and over. Actually, they might just be jockeying for power and headed toward a purifying self-destruction, without acting solely with the Democrats in mind. I think you're going to see new leadership elections on the Republican side after the elections, as more moderates retire or lose their races, and the conservative wackjobs consolidate their power with a smaller base. Expect more backstabbing and treachery between now and November. This is the picture of a political party in crisis.

I'm off to Finland for a week or so, to give a talk on music and film, to hear some new music, and to see dear friends. I suspect we will have plenty of opportunity to enjoy boiling hot saunas, intense salmiakki, and plates of hand-picked chanterelles. Pity me, dear friends, pity me.

I'll be busy but I may post some reports about what at least my Finnish acquaintances think about the upcoming American election. My suspicion is that they will be utterly shocked to learn that for all intents and purposes it's a tie. We should be, too.

Monday, September 29, 2008

I was just watching Bill Maher on the old TiVO and he had on a guest named Lisa Schiffrin, one of The Corner's many wingnut welfare queens. She explained that the conservatives were more capable of solving the economic crisis because they use reason and facts to solve problems unlike the overly emotional liberals who are blinded by their feelings.

That's so true. For instance, a conservative would never publish something like this in a major newspaper:

I had the most astonishing thought last Thursday. After a long day of hauling the kids to playdates and ballet, I turned on the news. And there was the president, landing on the deck of the USS Abraham Lincoln, stepping out of a fighter jet in that amazing uniform, looking--how to put it?--really hot. Also presidential, of course. Not to mention credible as commander in chief. But mostly "hot," as in virile, sexy and powerful.

You don't see a lot of that in my neighborhood, the Upper West Side of Manhattan. (I'm told there's more of it in the "red" states.) I was mesmerized. I flipped around watching W. land on many channels. I watched the whole speech, which was fine. But a business suit just doesn't do it the way a flight suit does. In the course of this I peeked over at my husband, the banker. He was in his third month of reading a book about the Six Day War and didn't seem to notice.

Nonetheless, I know that I am not the only one who entertained these untoward thoughts. The American media were fully aware of how stunning the president looked last week. And they chose to defuse it by referring endlessly to the "photo-oppiness" of the event. The man uses overwhelming military force to vanquish a truly evil foe, facing down balking former "allies," and he is not taken seriously as a foreign-policy president. He out top-guns the Hollywood version, and all the media can talk about is the impending campaign commercial.

With a few exceptions: Brian Williams shook his head in awe at the clip and said, if I may paraphrase, "that, ladies and gentlemen, is a president at the pinnacle of success, having just won a war." The New York Post ran the hot shot on its front page. And Newsweek called it a photo-op but gave the president what can only be called a centerfold.

Meanwhile David Gergen, arguably as bloodless a creature as has ever graced too many White Houses and TV shows, actually broke into a grin and said: "This will set the standard for advance men for years to come." Advance men? I think it will set a new standard for women voters.

I decided to run a reality check among the soccer moms I spend my days with. At my daughter's East Side school, my friend Emily, a mother of two and probably a liberal, examined the picture of the president in his fly-boy gear that I just happened to have in my purse. She looked carefully, grinned and said, "He's a hottie. No doubt about it. Really a hottie. Why haven't I noticed this before? He looks so much better than Michael Douglas in that movie we saw," comparing the tired, indifferent megastar of "The American President" to the totally present leader of the free world.

Alexandra, an unmarried event planner in her 30s, e-mailed: "Hot? SO HOT!!!!! THAT UNIFORM!" In a more restrained way, my friend Maggie, a writer/mom, explained: "I think he is actually protecting me and my sons, and I find that attractive in a man." Suzi, who did her mom time and now writes biographies, also began with restraint. I asked, casually, what she thought about President Bush. She answered, carefully, "He's so confident. He is a very credible, trustworthy leader." "Yeah," I pursue, "but do you think he's sexy?" "Oh God, yes," she said. "I mean, that swagger. George Bush in a pair of jeans is a treat to watch." This from a soft-spoken woman inclined to intellectual pursuits.

Back on the West Side, among the liberals I live surrounded by, there was dissent. At my younger children's preschool, comments ranged from "well he's cute, but not my type" to "I can't think of anything more revolting." Many of them still cite Bill Clinton and his allegedly penetrating intellect as more appealing.

Liberals make such a fetish of intellect. But who cares how smart you are if you can't make a decision and follow through? Mr. Clinton could not seem to do that with foreign policy, or with Miss Lewinsky. Still, I concede that having a Republican president with sex appeal is kind of a new idea. We haven't actually seen one in living memory. more here (if you can stomach it.)

That was Lisa Schiffrin, of course. Using reason and fact to solve her "problem."

As we contemplate this next election, I think it's a really good idea to recall just how full-on nuts the right wing was when they were riding high. It's this kind of dizzy, delusional hysteria that got us in this fix and it's important that they not be allowed to airbrush this behavior out of history.

So, they are all saying that Pelosi blew it because you never bring a vote to the floor unless you have the votes. But what do you do if they lie to your face? And apparently Democrats are not allowed to be "partisan" about this problem which translates into them taking responsibility for this epic shit pile the Republicans have created.

That headline says exactly what John McCain and the Republicans want to be the story. And they want to put Democrats in a rhetorical straitjacket by saying that they can't "politicize" the financial crisis the same way they couldn't "politicize" 9/11 or Iraq or Katrina. In other words, criticizing Republicans for their massive failures is always irresponsible.

Excuse me, but bullshit. We are in a very important election. Possibly the most important election in our lifetimes. Certainly, more important than the bail out, more important than anything is making sure that the Republicans are held responsible for this big shit pile and winning theelection. If McCain and the GOP win, it's going to take a lot more than 700 billion dollars to dig us out of this problem.

We may have even more chaos to look forward to in financial markets tomorrow as hedge fund redemptions cascade in for the end of the quarter as the NYT reports:

The big worry is that a spate of hurried sales could unleash a vicious circle within the hedge fund industry, with the sales leading to more losses, and those losses leading to more withdrawals, and so on. A big test will come on Tuesday, when many funds are scheduled to accept withdrawal requests for the end of the year.

“Everybody’s watching for redemptions,” said James McKee, director of hedge fund research at Callan Associates, a consulting firm in San Francisco. “And there could be a cascading effect, where redemptions cause other redemptions.”

Now that the Paulson plan is off the table, it's time to start dealing with this like grown-ups. This is a difficult situation. We are a month away from an historic election and the economy is in crisis. And we are going to see some new plans on the table over the next few days that will likely be a big improvement in the substance, but which may very well have to wait until the American people weigh in. Or not.

But if a new plan is to be presented by the Democrats, it means they are going to take ownership of the crisis and they'd better start thinking about passing it with a progressive argument. The Republicans are not going to be on board. I wrote after the debate that I wished Barack had made the point that all of his plans for investing in alternative energy, infrastructure and health care are not only the right thing to do, they are going to be necessary for revitalizing the economy. For several decades now we've been working under the false premise that the only thing the government can do to stimulate the economy in a time of recession is tax cuts. That's just not true. In fact, it is inadequate at times like these, as we are seeing. Action in the way of creating jobs and direct government activism is required.

So, with that in mind, perhaps it's time for them to start thinking like Democrats again --- the old fashioned Roosevelt kind. I received this email from a reader the other day that got me musing on the subject:

1. Naomi Klein's "Shock Doctrine" describes the process that seems to be at play here, but as she points out, there's no reason the same crisis can't be used to promote aggressive progressive policies. This is a historic opportunity to aggressively lobby for a progressive alternative (i.e. a massive Keynesian "emergency" training / public works / social safety net program in the New Deal tradition). You are in a good position to make the argument if you think it is worthwhile.

2. For the first time in many years, the GOP can't fall back on the "virtues of the free market" in debating this. If the market had not failed massively, then no bailout is necessary.

3. For the first time in many years, the GOP can't fall back on the "massive government spending/intervention" complaint in debating this. That complaint applies equally to this plan.

4. The GOP/Wall St.line is that this is as bad as it's gotten since the 30s (the last time Wall St. screwed everyone). This provides a perfect opening for the "worked before / can work again" line for progressive policies that have long been politically impossible.

5. Polls show that many Americans are unsure about the bailout, but those stating an opinion oppose it. Those who are "unsure" are likely primed to oppose this bailout, but think something must be done. It is hard to justify politically giving taxpayer money to the very same people who caused this so they can keep their houses in the Hamptons so that bad effects do not trickle down to average Americans (hence the "it's so very complicated" argument). By comparison, a new New Deal is very palatable to the extent people are convinced something does need to be done.

6. The economics of a bottom-up program are compelling. Certainly at least as compelling as a top-down bailout in terms of protecting Americans from the effects of a severe economic downturn.

7. A new version of the New Deal would create a Democratic majority for years to come. That's why the GOP has fought so hard for so long to dismantle the old New Deal. Democrats could emphasize that this is a temporary, emergency program - just as the Wall St. proposal allegedly is, but after the program's sunset there would be a strong new constituency supportive of extending this (and other progressive programs) and expanding the Democratic base of support.

8. McCain is trying to pose as a populist (and bank on Democrats floating a "compromise" bill he can oppose). Shifting the debate with an actual wholesale alternative puts him in a very difficult position, and at the very least prevents him from scoring cheap political points.

Anyway, the exact mechanisms of the plan aren't the essential thing right now. The point is that this is the single most spectacular moment of failure of the right wing "free market" mythology, and it comes on the heels of a number of other spectacular Republican failures. This is an unprecedented opportunity to aggressively put forward a wholesale progressive alternative to the GOP and stand firm.

Why not?

The first point about Naomi Klein and a progressive shock doctrine is absolutely correct. (See this fascinating interview with Klein by John Amato for a primer on how that works.) In crises, the usual suspects swoop in to take advantage of the situation and leave the average people holding the bag. It's disorienting to see this happen to the biggest economy in the world, but there's really no structural reason why it shouldn't happen to us too. The concept of the doctrine is to be prepared to take advantage of all openings --- and this is an opening.

The Shock Doctrine depends upon complexity. But politics depends on simplicity. The Republicans are relying on the voters' common sense reaction to something that seems to favor the people who caused the problem. It's very hard to argue with that and they might just persuade some people out there that they know who the real enemy is and will smite them --- Big Government and Wall Street. (And in any case, it's the smart move for a party out of power which needs to rebuild itself after being discredited. They can't afford to be associated with this and they know it.)

But the Democrats are failing to take advantage of the complexity of the situation and use simple politics to sell it. They should say that the economy is failing and we need massive government action to solve it. That's what Democrats do in a crisis like this. But they need to make the political message about the Democratic agenda for restoring the economy not about rescuing "the financial system" which nobody understands anyway.

Sure, they need to do something to shore up the financial markets, and some of that means they have to restore confidence which is a kind of psychological parlor game based upon assumptions that nobody can measure in advance. And middle class tax cuts are like candy they just can't seem to resist, so I suppose they have to keep it in there, (although I wish they'd take them off the table at some point because it's self defeating to constantly be saying that everyone is over taxed.) But the Democrats must also make the case that conservative policies creating massive income inequality, starving of the nation's infrastructure, neglect of the health care crisis and ignoring of the immediate need to invest in alternative energy and green jobs (not to mention useless wars) are part of the economic instability we are experiencing --- and addressing those needs is vital to restoring the economy. These aren't just good ideas on the merits, they are necessary for our security.

As my readers know, I believe that the Democrats should make an aggressive argument for progressive policies and liberal principles. I don't mind someone saying they can work with others, but I do object to saying Republicans have good ideas when they don't. The radical policies that have led us to this moment have failed but somebody needs to tell the American people exactly why and offer them a clear alternative. This crisis is an opportunity to spell that out so clearly that there will be no question for a generation that these ideas are as toxic as an adjustable rate mortgage.

The congress is going back to the drawing board. And maybe they'll hammer out another plan. But the political question is who is in the driver's seat this time. Clearly, the country is operating without a president right now --- he has absolutely no juice to get anything done and his administration is so discredited that they can't rally the public. Leadership on this is left to the Democrats. ( Republicans are going to go on strike just like the bankers and leave the whole thing in their hands.) If that's the case, then the Democrats should set forth a real progressive plan --- a New Deal for the 21st century.

Let's have the argument and let the American people decide. If the Democrats win it they will have a mandate for real progressive change in the middle of a crisis that demands it. If they play their cards right they'll end up neutering the failed conservative ideology for a generation, put in place some important and long neglected structural changes and mitigate the worst of this downturn at the same time. There's no reason that the Shock Doctrine can't be used for good.

Let Franklin Roosevelt be our guide. We take for granted now one of his signature political innovations: the idea of an executive "legislative agenda," a specific set of White House proposals, by which the success or failure of a presidency can be judged. FDR's was the first and most spectacular. He understood that the New Deal would pass quickly or it would not pass at all. And so, politically, he yoked Congress' willingness to pass his program without obstruction to Congress' willingness to address the national emergency tout court.

The New York Times profiled John McCain's penchant for gambling this weekend, and there actually were some serious elements to the story, including McCain buddying up with Indian casino lobbyists and giving them sweetheart deals, while punishing Jack Abramoff, who those lobbyists were competing with. It's a pretty damaging story, and the DNC jumped on it, in particular pushing this story in religious communities where gambling is frowned upon.

But today shows how McCain's gambling problem gets him into serious trouble. The guy who suspended his campaign to race back to Washington to save the economy, who then took credit for showing the leadership to get it passed, ended up bragging about passage before it ever happened.

Sen. John McCain (R-Ariz.) and his top aides took credit for building a winning bailout coalition – hours before the vote failed and stocks tanked.

The rush to claim he had engineered a victory now looks like a strategic blunder that will prolong the McCain’s campaign’s difficulty in finding a winning message on the economy.

Shortly before the vote, McCain had bragged about his involvement and mocked Sen. Barack Obama for staying on the sidelines.

“I've never been afraid of stepping in to solve problems for the American people, and I'm not going to stop now,” McCain told a rally in Columbus, Ohio. “Sen. Obama took a very different approach to the crisis our country faced. At first he didn't want to get involved. Then he was monitoring the situation.”

McCain, grinning, flashed a sarcastic thumbs up.

“That's not leadership. That's watching from the sidelines,” he added to cheers and applause.

Of course, it's even worse than that. When he swooped in to the Capitol the deal started falling apart, and when he visited the White House he stood mute as the whole thing went to pot. He left to snarl at Barack Obama in the debate, and returned to Washington but holed up in his apartment. The "I'm suspending the campaign" gambit was a big bet that came up completely empty.

McCain just gave a statement blaming Obama and the Democrats for partisanship (that mean ol' Nancy!) and urged everybody to keep working. But if there was a major crisis last week, it's even bigger now, with the Dow crashing before our eyes. No suspending the campaign today? (UPDATE: Greg Sargent also notes that McCain's campaign delivered a pretty strong finger-pointing press release right before McCain said "now is not the time to assign blame.")

I'm less worried about McCain than I am about the future of an Obama presidency and the US economic mess. He gambled and lost, putting his personal ambition far above the country at large.

(as a side note, this bill needed to fail. It was a repudiation of the leadership of both parties in the House and the closest thing in our system to a no-confidence vote. The left and the right came together and said "Hell No" to the middle. The solution is to let America decide who's right and who's wrong, and use a popular mandate as the lever to push this through instead of insider secrecy.)

The Republicans are saying that many of their members had promised to vote for the bill until they heard the Democrats being too mean in their speeches. It was inappropriate. So they voted against it at the last minute out of pique. Apparently they think this is some kind of excuse.( Of course that won't last. The Republicans will ultimately spin this as an act of fiscal integrity.)

Amazing. Pelosi brought it to the floor with the promise that the Republicans would deliver and they didn't. I swear to God, if there's a way to get punk'd, the Democrats will find it.

Not that I care. It doesn't break my heart that this bill didn't pass. But the idea that the Dems put themselves out there and the Republican hypocrites stabbed them in the back is so predictable that it puts me to sleep thinking about it. They'll never learn.

Update: Oh Jesus. Chris Matthews is out there calling the Republicans a "party of mavericks" as if that's some kind of insult in this environment. Oy.

And MSNBC is buying the GOP line that Pelosi may have ruined the economy because she was a bitch on the floor. They've got some business reporter on there saying that by blaming Republicans for the mess the Democrats are to blame for all of this.

So, the bill fails. You have to wonder how this happened. All morning we've been hearing that the Dems said they could deliver half and that they needed the GOP to deliver half. And now we see the Dems have delivered far more than half and the Republicans whiffed. Did the GOP lie and stab the Democrats in the back or did the Dems bring this to the floor knowing it would fail? (I think you can guess what I'd bet on.)

This is getting very, very interesting. Keep your eye on McCain.

The vote has been held open and they still need ten more. That sounds like a tall order.

Obviously the bailout bill is the order of the day (and I hear enough Congresscritters saying they "have to do something" and "we are all Murcans" that the ship has pretty much sailed) but there's another very interesting report out today, a long-awaited Justice Department Inspector General summary of the US Attorney firings.

In 2007 (before my time here) I was fairly obsessed with these prosecutor purges, and it became clear that the affected US Attorneys were singled out for nakedly political reasons and in most cases for failing to indict Democrats or insert themselves into the electoral process. The actions of the prosecutors who remained made the actions taken to fire those who failed to comply more pronounced. The ugly underbelly of Karl Rove politics was really ripped open for all to see, and no amount of denials would change that.

The report is about as thorough as it can be, given that key Republicans in the Justice Department, as well as elected officials caught up in the probe like New Mexico Senator Pete Domenici, simply stonewalled the investigation. This is particularly the case in the firing of New Mexico US Attorney David Iglesias.

The report concludes that Iglesias was removed as a result of complaints brought to DOJ by New Mexico GOP members of Congress and party activists, and shows that Karl Rove knew in advance of the decision. It reveals that at a meeting on November 15, 2006, Rep. Heather Wilson told Rove: "Mr. Rove, for what it's worth, the U.S. Attorney in New Mexico is a waste of breath." Rove's response: ""That decision has already been made. He's gone."

But it states that IG investigators were unable to determine how Rove knew this (Iglesias wasn't notifed until December 7), and what his possible role in the decision was, because Rove and White House counsel Harriet Miers refused to cooperate with the investigation.

Similarly, it notes that Kyle Sampson, who as chief of staff to Alberto Gonzales took the lead in bringing about the firings, gave "misleading after-the-fact explanations for why Iglesias was placed on the list." The report concludes: "[W]e question whether Sampson provided us the full story about Iglesias's placement on the list, as well as the reasons for other U.S. Attorney removals."

And: "Our investigation was also hindered by the refusal of Senator Domenici and his Chief of Staff to agree to an interview by us." (In April, Domenici, who is retiring this year, received a "qualified admonition" from the Senate ethics committee for his role in the firing.)

The report is a monster, but it can be boiled down to "the DoJ broke the law in spirit and probably in letter, but they won't give us enough information to figure out precisely how they broke the law, so... somebody else should figure that out." While it certainly appears that Fredo Gonzales and some of his top deputies perjured themselves before Congress, the report does not recommend criminal charges (it merely says that Fredo et al "failed to provide accurate and truthful statements about the removals and their role in the process,” which is... something different entirely?). However, it does clearly state that Gonzales and his lead deputy Paul McNulty turned a blind eye to the firings, essentially outsourcing personnel decisions to the White House political office, and that Kyle Sampson was largely responsible for the haphazard process both during and after the firings. And it asks for the appointment of a special prosecutor to investigate this further. And wouldn't you know it, Michael Mukasey went along with it:

WASHINGTON — Attorney General Michael B. Mukasey appointed a special prosecutor on Monday to investigate whether criminal charges should be brought against former Attorney General Alberto R. Gonzales and other officials in connection with the firings of nine of United States attorneys in 2006.

“The report makes plain that, at a minimum, the process by which nine U.S. attorneys were removed in 2006 was haphazard, arbitrary and unprofessional, and the way in which the Justice Department handled those removals and the resulting public controversy was profoundly lacking,” Mr. Mukasey said in a statement. The report called for further investigation to determine whether prosecutable offenses were committed either in the firings or in subsequent testimony about them.

Nora Dannehy, acting United States Attorney in Connecticut, will lead the investigation, Mr. Mukasey said. A graduate of Harvard Law School, she has served as a prosecutor for 17 years and specializes in white-collar and public corruption cases. She led the prosecution of the former governor of Connecticut, John Rowland, who pleaded guilty in 2004 to accepting $107,000 in gifts.Mr. Gonzales, who resigned last year after coming under criticism because of the firings, has been the main focus of interest, in part because several members of Congress charged that he may have perjured himself in his testimony through his memory lapses and misstatements about the firings.

Here's Mukasey's statement. I was a little surprised that he went ahead and did this. Sure, appointing a prosecutor inside the DoJ affords a little more control than an independent counsel, but Mukasey's team will be gone soon enough, and so this investigation certainly will carry over into the next Presidency. Which is as it should be. There is no way that these charlatans should be able to manage oversight over themselves.

The question, obviously, is how far the next President would be willing to go. And not just with the US Attorney purges, but a host of other topics (Murray Waas had additional information late last week about Fredo's trip to the hospital to bully John Ashcroft into signing off on the illegal wiretapping program - looks like Bush personally directed it). The mechanisms are now in place, at least in this case, to continue serious investigations into White House crimes without meddling or stonewalling from Bush and his cronies. That's an opprtunity we can't afford to pass up.

In Manhattan, at 85th Street and West End Ave., there’s an apartment building going up; the sign advertises “21st century prewar living!” which only makes sense if you spend a lot of time in New York. But I found myself thinking about that sign when reading this terrific WSJ article about how the fall of Lehman triggered global panic.

One lesson of the article is that Paulson screwed up very badly by letting Lehman fail; it’s not clear where Bernanke stood, but it seems clear that Tim Geithner of the NY Fed was on the other side.

What the article really adds, though, is the details of the chain reaction that did the damage.

Interesting, no? I don't actually get why Paulson was so intent upon letting Lehman fail in this environment. Maybe it was an experiment. Whatever it was, it seems to have made things worse, although that doesn't necessarily translate into the kind of massive bailout he subsequently proposed either. Perhaps King Henry is clueless?

And here's Krugman's reasoning as to why it's better to hold one's nose and vote for the plan than not let it pass:

I’m being asked two big questions about this thing: (1) Was it really necessary? (2) Shouldn’t Dems have tossed the whole Paulson approach out the window and done something completely different?

On (1), the answer is yes. It’s true that some parts of the real economy are doing OK even in the face of financial disruption; big companies can still sell bonds (and have lots of cash on hand), qualifying home buyers can still get Fannie-Freddie mortgages, and so on. But commercial paper, which is important to a lot of businesses, is in trouble, and I’m hearing anecdotes about reduced credit lines causing smaller businesses to pull back. Plus there’s a serious chance of a run on the hedge funds, which could make things a lot worse. With the economy already looking like it’s headed into a serious recession by any definition, the risks of doing nothing look too high.

It’s true that we might be able to stagger through with more case-by-case rescues — I think of this as the “two, three, many AIGs” strategy; in fact, we might not be at this point if Paulson hadn’t decided to make an example of Lehman. But right now it’s not even clear who to rescue, and the credit markets are freezing up as you read this (1-month t-bill at 0.04 %, TED spread at 3.5)

On (2), the call is tougher. But putting myself in Barney Frank or Nancy Pelosi’s shoes, I’d look at it this way: the Democrats could start over, with a bailout plan that is, say, centered on purchases of preferred stock and takeovers of failing firms — basically, a plan clearly focused on recapitalizing the financial sector, with nationalization where necessary. That’s what the plan should have looked like.

Maybe such a plan would have passed Congress; and maybe, just maybe Bush would have signed on; Paulson is certainly desperate for a deal.

But such a plan would have had next to no Republican votes — and the Republicans would have demagogued against it full tilt. And the Democratic leadership cannot, cannot, be seen to have sole ownership of this stuff.

So that, I think, is why it had to be done this way. I don’t like it, and I don’t like the plan, but I see the constraints under which Dodd, Frank, Pelosi, and Reid were operating.

I see the politics of this the same way he does. The problem for Democrats is that they are pretty much the only governing entity working today. Bush and his boys are lame ducks who have no political stake in the outcome. The Republicans stand to gain by being obstructionists in this environment either in this coming election and almost certainly the next one. This is an opportunity for them. Democrats have a different set of problems because they will be held responsible for economic failure because they are the majority.

That is not to say that I think they've handled this correctly. I think they've been far too willing to accept that responsibility --- you can see their hunger for leadership power written all over their faces. They're wonky types who like this stuff. But if they felt they had no choice (a debatable point, to be sure) they should have been holding their noses and refusing to do anything in public without Paulson, Bush and the Republican leadership standing arm in arm with them every single time. If they have some kind of illusion that this is politically helpful to them, they are nuts. Before the Republicans are through with them, Bush will have been disappeared and Bill Clinton, Nancy Pelosi and Barack Obama cooked this crisis up together during a white house coffee with Jeremiah Wright back in 1997. (And don't think it won't work.)

A lot of bloggers are asking their readers to call their representatives to vote no on the bill. I think it's a good idea, but I have to be honest and tell you that I don't think it will make any difference. Polls are showing that people in general are pretty supportive of Obama and the Democrats on this so far:

The higher scores of Obama and the Democrats in Congress relative to McCain and the Republicans in Congress are mainly owing to differences in intraparty support for each side. Nearly 8 in 10 Democrats approve of the way Obama has responded to the Wall Street crisis, compared with only 7 in 10 Republicans approving of McCain. Similarly, 65% of Democrats approve of the Democratic leaders in Congress, in contrast to 55% of Republicans approving of the Republican leaders in Congress.

If the bill is going to fail it will be because of Republicans who have decided to follow Newt Gingrich's advice and reanimate the GOP corpse on the backs of faux fiscal responsibility.

However, it is important that the Democrats understand that some of their constituents are as dismayed by this bail out as the Republicans' are. Otherwise, they are likely to think that taking ownership of this crisis is in their political interest and it most definitely isn't. And frankly, I'm as scared by that as I am by this crisis. If the Democrats don't fully grasp what the political stakes are for the next generation then they are even bigger fools than I thought they were. This is one of those defining moments and if they persist in showing up at press conferences high fiving and congratulating themselves publicly for bailing out rich people, they are signing their own death warrants. This economic crisis isn't going away. They'd better figure out the right politics of this right now because that popular support isn't going to last.

When Tony Snow resigned as Bush's press secretary because of cancer, Commander Codpiece reassured us that Snow would completely recover. Not mind you, that he merely wished or prayed for Snow's recovery, but that he would get healthy. On a personal level, I felt very bad for Snow when I heard that because I knew Churchill Jr. was a pathological liar - Bush certainly had been told the cancer was terminal. And sure enough, less than a year later, Snow was dead.

The government’s planned financial bailout is a significant if costly step intended to avert economic calamity, but it may not be the last one, according to economists and finance experts.

This disaster, so patently a function of Republican ideology and incompetence, would, in a rational world, be the death knell for movement conservatism, if not the Republican party itself. But we live in a bizarro world where it is very likely that precisely the opposite will happen.

Sunday, September 28, 2008

Coming To Their Senses

by digby

It seems as though the American people now understand that Barack Obama isn't some kind of foreigner from an other planet and that McCain is a crotchety old kook:

PRINCETON, NJ -- Barack Obama leads John McCain, 50% to 42% among registered voters in the latest Gallup Poll Daily tracking update for Thursday, Friday, and Saturday -- just one point shy of his strongest showing of the year.

These results, from Sept. 25-27, span the time period since John McCain made the announcement that he was temporarily suspending his campaign and returning to Washington to work for a bipartisan solution to the financial crisis, and since Congressional leaders first announced progress towards the resolution of a financial bailout bill. The results also include one complete day (Saturday) after the first presidential debate on Friday night. McCain had reached a point where he was tied with Obama earlier in the week, but Obama has gained steadily in each of the last three days' reports. Overall, Obama has gained four percentage points over the last three days, while McCain has lost four points, for an eight-point swing in the "gap" or margin.

It's not just the debate. This only includes Friday Saturday. But I expect that between Obama's calm and intelligent demeanor during a crisis, McCain's antics of last week and the surreal Palin show, a lot of people have stepped back and realized that they can't succumb to the usual trivial culture war tribalism this time.

WOW, WE'VE MADE QUITE A MESS OF THINGS here on Wall Street: Fannie and Freddie in conservatorship, investment banks in the tank, AIG nationalized. Thanks for sending us your new trillion-dollar bailout.

We on Wall Street feel somewhat compelled to take at least some responsibility. We used excessive leverage, failed to maintain adequate capital, engaged in reckless speculation, created new complex derivatives. We focused on short-term profits at the expense of sustainability. We not only undermined our own firms, we destabilized the financial sector and roiled the global economy, to boot. And we got huge bonuses.

But here's a news flash for you, D.C.: We could not have done it without you. We may be drunks, but you were our enablers: Your legislative, executive, and administrative decisions made possible all that we did. Our recklessness would not have reached its soaring heights but for your governmental incompetence.

We on Wall Street do not deny our part. We created these securities, we rated them triple-A, we traded them without understanding them. Now that they have gone bad, we are real close to getting the rest of the country to take them off our hands.

Thanks, D.C. None of this would have been possible without you.

Very truly yours,Wall Street

That's funny. But scary. My question is what is going to be done about this once this fabulous deal is done (if it gets done.) The Republicans have already set themselves up as the scourges of Wall Street and Washington perfidy, (as if they haven't been furiously servicing their Big Money bosses for the past decade like cheap, two dollar whores.) They will get some gold plated pitchforks and immediately begin running against the big spending liberals and their rich friends.

And after this week, it's going to be much easier for them to make that case. Even if it passes, it's clear that it will happen with at least a fairly large number of Republicans voting against it. (It still remains to be seen if McCain will find a way to vote against it. He's a gambler, and he may just go all in... )

The argument over this bailout is going to be with us for a long time to come and unless Democrats play this right, they are going to wind up holding the bag. The "populist Republican" meme is alredy out there and starting to take hold. They've bet on this economy getting very bad and being able to blame the hated Bush and Clinton for causing it and then blame the Democrats for throwing money at the problem and failing to solve it.

Why would the Democrats let them do that?

Right now I'm watching Pelosi and Reid, Frank and Dodd stand there all by themselves taking "credit" for this bill. They are handing out plaudits to all the others who "helped" them get it done like members of "the Hills" at the MTV awards.

The optics are all wrong. If they really feel they have to do this thing each one of them should have a Republican under each arm every time they make an announcement.

Update:

"Nobody wants to have to support this bill," said Rep. John A. Boehner, R-Ohio, the minority leader. But, he added, "I'm encouraging every member whose conscience will allow them to support this."

That's quite an endorsement. Golly, I wonder how many Republicans aren't going to be able to support this extremely unpopular bill because their consciences won't let them? you can't blame them. they are all men and women of principle, you know, who put the taxpayers first.

Gosh, I sure hope Mitch McConnell can persuade St John of Sedona to abandon his crusade against the great malefactors of wealth to back the extremely unpopular plan or he might end up voting against it and using it as a weapon in his presidential campaign. (His campaign manager suggests he's actually responsible for knocking heads together to get a deal, so maybe not.) I'm actually less concerned about him these days. He's so unhinged that I'm not sure it makes a difference. But it could impact the congressional elections in a big way.

I don't know about you, but McCain's dizzying Britney-like behavior last week screams "I don't want to go to rehab." The next thing you know he'll be speaking in a British accent and shaving his head...

And according to today'sNY Times, he actually does have at the very least a potential gambling problem. In more ways than one:

Perhaps no episode burnished Mr. McCain’s image as a reformer more than his stewardship three years ago of the Congressional investigation into Jack Abramoff, the disgraced Republican Indian gambling lobbyist who became a national symbol of the pay-to-play culture in Washington. The senator’s leadership during the scandal set the stage for the most sweeping overhaul of lobbying laws since Watergate.

“I’ve fought lobbyists who stole from Indian tribes,” the senator said in his speech accepting the Republican presidential nomination this month.

But interviews and records show that lobbyists and political operatives in Mr. McCain’s inner circle played a behind-the-scenes role in bringing Mr. Abramoff’s misdeeds to Mr. McCain’s attention — and then cashed in on the resulting investigation. The senator’s longtime chief political strategist, for example, was paid $100,000 over four months as a consultant to one tribe caught up in the inquiry, records show.

Mr. McCain’s campaign said the senator acted solely to protect American Indians, even though the inquiry posed “grave risk to his political interests.”

As public opposition to tribal casinos has grown in recent years, Mr. McCain has distanced himself from Indian gambling, Congressional and American Indian officials said.

But he has rarely wavered in his loyalty to Las Vegas, where he counts casino executives among his close friends and most prolific fund-raisers. “Beyond just his support for gaming, Nevada supports John McCain because he’s one of us, a Westerner at heart,” said Sig Rogich, a Nevada Republican kingmaker who raised nearly $2 million for Mr. McCain at an event at his home in June.

Only six members of Congress have received more money from the gambling industry than Mr. McCain, and five hail from the casino hubs of Nevada and New Jersey, according to data from the Center for Responsive Politics dating back to 1989. In the presidential race, Senator Barack Obama has also received money from the industry; Mr. McCain has raised almost twice as much.

So, reformer McCain's Abramoff investigations actually ended up benefiting his contributors and lobbyists who are now working on his campaigns? How convenient. Are there any of his vaunted reform credentials that aren't complete bullshit?

And on a personal level, the maverick seems to really, really like to gamble under stress, which his behavior in picking Palin and the antics last week suggest is exactly what's happening:

In May 2007, as Mr. McCain’s presidential bid was floundering, he spent a weekend at the MGM Grand on the Las Vegas strip. A fund-raiser hosted by J. Terrence Lanni, the casino’s top executive and a longtime friend of the senator, raised $400,000 for his campaign. Afterward, Mr. McCain attended a boxing match and hit the craps tables.

For much of his adult life, Mr. McCain has gambled as often as once a month, friends and associates said, traveling to Las Vegas for weekend betting marathons. Former senior campaign officials said they worried about Mr. McCain’s patronage of casinos, given the power he wields over the industry. The officials, like others interviewed for this article, spoke on condition of anonymity.

“We were always concerned about appearances,” one former official said. “If you go around saying that appearances matter, then they matter.”

The former official said he would tell Mr. McCain: “Do we really have to go to a casino? I don’t think it’s a good idea. The base doesn’t like it. It doesn’t look good. And good things don’t happen in casinos at midnight.”

“You worry too much,” Mr. McCain would respond, the official said.

McCain needs to worry a bit more. His corrupt ties to lobbyists in the face of his constant hectoring about integrity is very revealing. The man clearly protests too much. More importantly, we should all worry that this erratic, intemperate flyboy is a big time gambler who plays with big time stakes. He certainly rolled the dice on Palin and that could have huge consequences both for his ability to win the election --- and for the country should he manage to eke out a victory.

These days McCain looks much less like a maverick and more like someone who's got problems and can't ask for help.

They supposedly have a deal. Again. But this fearmongering rhetoric about how people won't be able to access their money in the ATMs or that their paychecks won't be any good is absolutely outrageous. They are actually trying to induce panic among average Americans.

And it's highly suspicious. Why, if I didn't know better I'd think they were making a political argument rather than an economic one. They wouldn't do that would they?

Sen. John McCain retracted Sarah Palin's stance on Pakistan Sunday morning, after the Alaska governor appeared to back Sen. Barack Obama's support for unilateral strikes inside Pakistan against terrorists

"She would not…she understands and has stated repeatedly that we're not going to do anything except in America's national security interest," McCain told ABC's George Stephanopoulos of Palin. "In all due respect, people going around and… sticking a microphone while conversations are being held, and then all of a sudden that's—that's a person's position… This is a free country, but I don't think most Americans think that that's a definitve policy statement made by Governor Palin."

Saturday night, while on a stop for cheesesteaks in South Philadelphia, Palin was questioned by a Temple graduate student about whether the U.S. should cross the border from Afghanistan into Pakistan.

"If that's what we have to do stop the terrorists from coming any further in, absolutely, we should," Palin said.

I saw the interview and Maverick looked mighty peeved. Daddy doesn't like being embarrassed on TV. Somebody's going to be in restriction for a good long while for that one.

We all know the Village loves to continuously reward those who have been wrong by turning to them for solutions to problems they had a hand in creating, but we can't forget that they also ignore those who were right.

In the case of the financial crisis, nobody was more right that Nouriel Roubini, who was recently featured in this profile in the New York Times:

August 17, 2008

Dr. Doom

By STEPHEN MIHM

On Sept. 7, 2006, Nouriel Roubini, an economics professor at New York University, stood before an audience of economists at the International Monetary Fund and announced that a crisis was brewing. In the coming months and years, he warned, the United States was likely to face a once-in-a-lifetime housing bust, an oil shock, sharply declining consumer confidence and, ultimately, a deep recession. He laid out a bleak sequence of events: homeowners defaulting on mortgages, trillions of dollars of mortgage-backed securities unraveling worldwide and the global financial system shuddering to a halt. These developments, he went on, could cripple or destroy hedge funds, investment banks and other major financial institutions like Fannie Mae and Freddie Mac.

The audience seemed skeptical, even dismissive. As Roubini stepped down from the lectern after his talk, the moderator of the event quipped, “I think perhaps we will need a stiff drink after that.” People laughed — and not without reason. At the time, unemployment and inflation remained low, and the economy, while weak, was still growing, despite rising oil prices and a softening housing market. And then there was the espouser of doom himself: Roubini was known to be a perpetual pessimist, what economists call a “permabear.” When the economist Anirvan Banerji delivered his response to Roubini’s talk, he noted that Roubini’s predictions did not make use of mathematical models and dismissed his hunches as those of a career naysayer.

But Roubini was soon vindicated. In the year that followed, subprime lenders began entering bankruptcy, hedge funds began going under and the stock market plunged. There was declining employment, a deteriorating dollar, ever-increasing evidence of a huge housing bust and a growing air of panic in financial markets as the credit crisis deepened. By late summer, the Federal Reserve was rushing to the rescue, making the first of many unorthodox interventions in the economy, including cutting the lending rate by 50 basis points and buying up tens of billions of dollars in mortgage-backed securities. When Roubini returned to the I.M.F. last September, he delivered a second talk, predicting a growing crisis of solvency that would infect every sector of the financial system. This time, no one laughed. “He sounded like a madman in 2006,” recalls the I.M.F. economist Prakash Loungani, who invited Roubini on both occasions. “He was a prophet when he returned in 2007.”

Over the past year, whenever optimists have declared the worst of the economic crisis behind us, Roubini has countered with steadfast pessimism. In February, when the conventional wisdom held that the venerable investment firms of Wall Street would weather the crisis, Roubini warned that one or more of them would go “belly up” — and six weeks later, Bear Stearns collapsed. Following the Fed’s further extraordinary actions in the spring — including making lines of credit available to selected investment banks and brokerage houses — many economists made note of the ensuing economic rally and proclaimed the credit crisis over and a recession averted. Roubini, who dismissed the rally as nothing more than a “delusional complacency” encouraged by a “bunch of self-serving spinmasters,” stuck to his script of “nightmare” events: waves of corporate bankrupticies, collapses in markets like commercial real estate and municipal bonds and, most alarming, the possible bankruptcy of a large regional or national bank that would trigger a panic by depositors. Not all of these developments have come to pass (and perhaps never will), but the demise last month of the California bank IndyMac — one of the largest such failures in U.S. history — drew only more attention to Roubini’s seeming prescience.

He claims that he hasn't been consulted by congress or the treasury and I believe him. Doing so would mean that all the serious people who have been saying that we had averted a crisis were wrong --- and also saying that the plan as currently conceived by those people was also wrong.

I don't know what the plan is going to finally look like, obviously. But as of Friday, Roubini wasn't sanguine about what he was seeing. He certainly backs intervention, as do nearly all economists, but he characterizesthis bailout in terms that are quite startling:

The Treasury plan (even in its current version agreed with Congress) is very poorly conceived and does not contain many of the key elements of a sound and efficient and fair rescue plan. Like in my 10 step HOME plan many other economists and commentators (Charles Calomiris, Raghu Rajan, Kotlikoff and Mehrling, Luigi Zingales, Martin Wolf, Barry Ritholtz, Chris Whalen and twenty others whose views have been featured this week in the RGE Monitor group blogs) have presented ideas that would have minimized the cost to the US taxpayer of a resolution of this financial crisis. It is a disgrace that no professional economist was consulted by Congress or invited to present his/her views at the Congressional hearings on the Treasury rescue plan.

Specifically, the Treasury plan does not formally provide senior preferred shares for the government in exchange for the government purchase of the toxic/illiquid assets of the financial institutions; so this rescue plan is a huge and massive bailout of the shareholders and the unsecured creditors of the firms; with $700 billion of taxpayer money the pockets of reckless bankers and investors have been made fatter under the fake argument that bailing out Wall Street was necessary to rescue Main Street from a severe recession.

The Treasury plan is a disgrace: a bailout of reckless bankers, lenders and investors that provides little direct debt relief to borrowers and financially stressed households and that will come at a very high cost to the US taxpayer. And the plan does nothing to resolve the severe stress in money markets and interbank markets that are now close to a systemic meltdown.

If that's true, then this plan will end up being an economic Iraq. And just as people who said "No Blood For Oil" were told to sit down and shut up or risk having the boogeyman use drone planes to create mushroom clouds in shopping malls, those who are saying today, "no bail out for the rich" are similarly being told that the global economy will suffer a nuclear meltdown if the government doesn't spend this enormous amount of money. And just like then, this all happened in the few short weeks between September and November in a major election year.

We don't know if there are financial WMDs out there. Certainly, enough people think there are that you can't dismiss it. But when the experts who have been predicting the WMD say that the plan to rid the world of them is fatally flawed and won't cure the problem, then they should be listened to. And unfortunately, that won't happen. We're listening to the usual suspects who have always been wrong about everything. And the results are likely to as good as they always are.

I'm not expert in these matters, but the more I read, the less I'm sanguine that this huge giveaway is designed to do anything but constrict the next president from being able to successfully intervene in the recession. The money will be gone, the problem will be growing and there will be fewer tools available to adequately stimulate the economy.

I wish that Barack had made the explicit argument in the debate that he would have to spend money on infrastructure and alternative energy to stimulate the economy by creating jobs, while reforming health care to take the cost burden off of businesses and reduce overall expenditures. If there is going to be a severe recession as everyone says, then the argument needs to be made forcefully, right now, that the government will have to spend a lot of money to keep it from spiraling down. If they don't, then this bailout of Wall Street, which is being mischaracterized as the saving of Main Street as well, is going to be the only shot allowed, because the fiscal scolds are already gathering to hammer home the message that the government is broke and can't afford to spend the money.

John McCain called for a freeze on government spending in a recession and he's crazy enough to do it. If he wins it's a terrible disaster on a number of different levels. But you can bet that even if he loses he will become a leader of the Republican Obstruction caucus and will do everything in his power to prevent the government from doing what it very likely will need to do --- spend money.

Saturday, September 27, 2008

After declaring he’d return to Washington to help with the bailout negotiations immediately after last night’s debate, Sen. John McCain (R-AZ) never went to Capitol Hill today. In fact, McCain stayed largely holed up in his Arlington apartment, leaving only to go to his campaign headquarters just around the block, the New York Times reports:

Asked why Mr. McCain did not go to Capitol Hill after coming back to Washington to help with negotiations, [McCain adviser] Mr. Salter replied that “he can effectively do what he needs to do by phone."

So this diva gets the cameras assembled on Wednesday and gravely intones that he has to jet to Washington to save the economy. By Thursday he's blown up the negotiations, by Friday he's unsuspended the suspension, and she he shoots back to Washington to continue the swashbuckling, which consists of cleaning out the refrigerator and puttering around the house.

And then there's that coup de grace comment by Mark Salter, that "he can effectively do what he needs to do by phone." Um, then why couldn't he have done that on, you know, Wednesday?

I wonder what exciting reality stunts The John McCain Show will have in store for us next week? Maybe he'll eat a live scorpion to grab himself immunity!

In an election campaign notable for its surprises, Sarah Palin, the Republican vice- presidential candidate, may be about to spring a new one — the wedding of her pregnant teenage daughter to her ice-hockey-playing fiancé before the November 4 election.

Inside John McCain’s campaign the expectation is growing that there will be a popularity boosting pre-election wedding in Alaska between Bristol Palin, 17, and Levi Johnston, 18, her schoolmate and father of her baby. “It would be fantastic,” said a McCain insider. “You would have every TV camera there. The entire country would be watching. It would shut down the race for a week.”

There is already some urgency to the wedding as Bristol, who is six months pregnant, may not want to walk down the aisle too close to her date of delivery. She turns 18 on October 18 . . .

. . . McCain is expected to have a front-row seat at Bristol’s wedding and to benefit from the outpouring of goodwill that it could bring. “What’s the downside?” a source inside the McCain campaign said. “It would be wonderful. I don’t know that there has ever been a pre-election wedding before.”

As usual in the McCain campaign, a good idea is described as an idea that's never been tried before.